Differential Analysis for a Lease or Sell Decision: Inman Construction Company is considering selling excess machinery with a book value of $278,500 (original cost of $399,100 less accumulated depreciation of $120,600) for $276,900, less a 5% brokerage commission. Alternatively, the machinery can be leased for a total of $284,100 for five years, after which it is expected to have no residual value. During the period of the lease, Inman Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $25,700. Prepare a differential analysis, dated January 3, 2014, to determine whether Inman should lease (Alternative 1) or sell (Alternative 2) the machinery.

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1. Differential Analysis for a Lease-or-Sell Decision Inman Construction Company is considering selling excess machinery with a book value of $279,300 (original cost of $399,200 less accumulated depreciation of $119,900) for $276,600, less a 5% brokerage commission. Alternatively, the machinery can be leased to another company for a total of $283,600 for five years, after which it is expected to have no residual value. During the period of the lease, Inman Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $25,100. 2. Differential Analysis for a Discontinued Product A condensed income statement by product line for Crown Beverage Inc. indicated the following for King Cola for the past year: Sales $234,500 Cost of goods sold 112,000 Gross profit $122,500 Operating expenses 143,000 Loss from operations $(20,500) It is estimated that 16% of the cost of goods sold represents fixed factory overhead costs and that 18% of the…

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Differential Analysis for a Lease-or-Sell Decision Sure-Bilt Construction Company is considering selling excess machinery with a book value of $280,600 (original cost of $398,600 less accumulated depreciation of $118,000) for $277,700, less a 5% brokerage commission. Alternatively, the machinery can be leased to another company for a total of $286,000 for five years, after which it is expected to have no residual value. During the period of the lease, Sure-Bilt Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $26,500. Question Content Area a.  Prepare a differential analysis, dated May 25 to determine whether Sure-Bilt should lease (Alternative 1) or sell (Alternative 2) the machinery. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential AnalysisLease Machinery (Alt. 1) or Sell Machinery (Alt. 2)May 25   Lease Machinery(Alternative 1) Sell Machinery(Alternative 2) Differential…

Differential Analysis for a Lease-or-Sell Decision Sure-Bilt Construction Company is considering selling excess machinery with a book value of $283,000 (original cost of $401,300 less accumulated depreciation of $118,300) for $276,900, less a 5% brokerage commission. Alternatively, the machinery can be leased to another company for a total of $285,900 for five years, after which it is expected to have no residual value. During the period of the lease, Sure-Bilt Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $26,300. a. Prepare a differential analysis, dated May 25 to determine whether Sure-Bilt should lease (Alternative 1) or sell (Alternative 2) the machinery. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Lease Machinery (Alt. 1) or Sell Machinery (Alt. 2) May 25 Differential Effect on Income (Alternative 2) Lease Machinery Sell Machinery (Alternative 1) (Alternative 2)…

Differential Analysis for a Lease-or-Sell Decision Sure-Bilt Construction Company is considering selling excess machinery with a book value of $281,400 (original cost of $400,900 less accumulated depreciation of $119,500) for $275,200, less a 5% brokerage commission. Alternatively, the machinery can be leased to another company for a total of $286,100 for five years, after which it is expected to have no residual value. During the period of the lease, Sure-Bilt Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $26,400. a.  Prepare a differential analysis, dated May 25 to determine whether Sure-Bilt should lease (Alternative 1) or sell (Alternative 2) the machinery. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Lease Machinery (Alt. 1) or Sell Machinery (Alt. 2) May 25   Lease Machinery(Alternative 1) Sell Machinery(Alternative 2) Differential Effects(Alternative…

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Differential Analysis for a Lease-or-Sell Decision Inman Construction Company is considering selling excess machinery with a book value of $280,200 (original cost of $398,800 less accumulated depreciation of $118,600) for $274,600, less a 5% brokerage commission. Alternatively, the machinery can be leased to another company for a total of $285,500 for five years, after which it is expected to have no residual value. During the period of the lea Inman Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $24,800. a. Prepare a differential analysis, dated May 25 to determine whether Inman should lease (Alternative 1) or sell (Alternative 2) the machinery. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Revenues Costs Differential Analysis Lease Machinery (Alt. 1) or Sell Machinery (Alt. 2) May 25 Income (Loss) Lease Machinery Sell Machinery (Alternative 1) (Alternative 2) EU Differential Effect on Income…